{"id":3490,"date":"2021-06-12T12:31:46","date_gmt":"2021-06-12T04:31:46","guid":{"rendered":"https:\/\/www.ukm.my\/jem\/article\/testing-a-non-linear-model-of-monetary-policy-reaction-function-evidence-from-malaysia\/"},"modified":"2021-09-09T12:29:59","modified_gmt":"2021-09-09T04:29:59","slug":"testing-a-non-linear-model-of-monetary-policy-reaction-function-evidence-from-malaysia","status":"publish","type":"article","link":"https:\/\/www.ukm.my\/jem\/article\/testing-a-non-linear-model-of-monetary-policy-reaction-function-evidence-from-malaysia\/","title":{"rendered":"Testing a Non-Linear Model of Monetary Policy Reaction Function: Evidence from Malaysia"},"content":{"rendered":"

This paper estimates a nonlinear model of monetary policy reaction function by augmenting the standard Taylor rule equation for the case of Malaysia. Monetary policy reaction function is identified by which the BNM sets the current level of policy rates after observing the current level of output, inflation and exchange rate, and lags of these variables (backward looking). Using quarterly time series data set spanning from 1991 to 2014, the findings support the relevance of Taylor rule in which the Bank Negara Malaysia (BNM) sets their policy rates based on both inflation and output growth. In addition, the BNM has also considered the exchange rate in their reaction function.<\/p>\n","protected":false},"template":"","tags":[41,1040,116,1041],"jel-code":[],"article-type":[1329],"class_list":["entry","author-jem","post-3490","article","type-article","status-publish","tag-inflation","tag-interest-rate","tag-monetary-policy","tag-taylor-rule","article-type-normal-article"],"yoast_head":"\nTesting a Non-Linear Model of Monetary Policy Reaction Function: Evidence from Malaysia | Jurnal Ekonomi Malaysia<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ukm.my\/jem\/article\/testing-a-non-linear-model-of-monetary-policy-reaction-function-evidence-from-malaysia\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Testing a Non-Linear Model of Monetary Policy Reaction Function: Evidence from Malaysia | Jurnal Ekonomi Malaysia\" \/>\n<meta property=\"og:description\" content=\"This paper estimates a nonlinear model of monetary policy reaction function by augmenting the standard Taylor rule equation for the case of Malaysia. Monetary policy reaction function is identified by which the BNM sets the current level of policy rates after observing the current level of output, inflation and exchangeContinue Reading\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.ukm.my\/jem\/article\/testing-a-non-linear-model-of-monetary-policy-reaction-function-evidence-from-malaysia\/\" \/>\n<meta property=\"og:site_name\" content=\"Jurnal Ekonomi Malaysia\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Jurnal-Ekonomi-Malaysia-JEM-104142808087485\" \/>\n<meta property=\"article:modified_time\" content=\"2021-09-09T04:29:59+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@EkonomiJurnal\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/article\\\/testing-a-non-linear-model-of-monetary-policy-reaction-function-evidence-from-malaysia\\\/\",\"url\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/article\\\/testing-a-non-linear-model-of-monetary-policy-reaction-function-evidence-from-malaysia\\\/\",\"name\":\"Testing a Non-Linear Model of Monetary Policy Reaction Function: Evidence from Malaysia | Jurnal Ekonomi Malaysia\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/#website\"},\"datePublished\":\"2021-06-12T04:31:46+00:00\",\"dateModified\":\"2021-09-09T04:29:59+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/article\\\/testing-a-non-linear-model-of-monetary-policy-reaction-function-evidence-from-malaysia\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.ukm.my\\\/jem\\\/article\\\/testing-a-non-linear-model-of-monetary-policy-reaction-function-evidence-from-malaysia\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/article\\\/testing-a-non-linear-model-of-monetary-policy-reaction-function-evidence-from-malaysia\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Articles\",\"item\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/article\\\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Testing a Non-Linear Model of Monetary Policy Reaction Function: Evidence from Malaysia\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/#website\",\"url\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/\",\"name\":\"Jurnal Ekonomi Malaysia\",\"description\":\"Universiti Kebangsaan Malaysia\",\"publisher\":{\"@id\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/#organization\",\"name\":\"Jurnal Ekonomi Malaysia\",\"url\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/wp-content\\\/uploads\\\/2021\\\/05\\\/cropped-browser-icon-letter-1.png\",\"contentUrl\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/wp-content\\\/uploads\\\/2021\\\/05\\\/cropped-browser-icon-letter-1.png\",\"width\":512,\"height\":308,\"caption\":\"Jurnal Ekonomi Malaysia\"},\"image\":{\"@id\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/#\\\/schema\\\/logo\\\/image\\\/\"},\"sameAs\":[\"https:\\\/\\\/www.facebook.com\\\/Jurnal-Ekonomi-Malaysia-JEM-104142808087485\",\"https:\\\/\\\/x.com\\\/EkonomiJurnal\"]}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Testing a Non-Linear Model of Monetary Policy Reaction Function: Evidence from Malaysia | Jurnal Ekonomi Malaysia","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.ukm.my\/jem\/article\/testing-a-non-linear-model-of-monetary-policy-reaction-function-evidence-from-malaysia\/","og_locale":"en_US","og_type":"article","og_title":"Testing a Non-Linear Model of Monetary Policy Reaction Function: Evidence from Malaysia | Jurnal Ekonomi Malaysia","og_description":"This paper estimates a nonlinear model of monetary policy reaction function by augmenting the standard Taylor rule equation for the case of Malaysia. 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